This year could set a new record for Asia Pacific private equity real estate fund-raising as new vehicles continue to pull in capital.
Blackstone raised a record $7.1bn for its second Asia Pacific real estate fund in March, giving it potential spending power of more than $20bn in the region and making up the bulk of the $8.9bn raised for Asia Pacific funds in the first quarter, according to Preqin research.
Oliver Senchal, head of real estate products at Preqin. says: “APAC-focused fundraising should easily surpass most post-crisis years, especially considering the $8.9bn raised in Q1 surpasses the opening quarters of 2007 and 2008 – the record fundraising years for the region.
“While unlikely to continue the momentum of those pre-crisis years, the pipeline of funds that could close by the end of the year is strong, with 70 vehicles collectively seeking $19bn. If the average H2 fundraising totals of recent years are added to the $11bn already raised then 2018 could come close to the $20bn raised in 2006.”
The strong first quarter follows a strong 2017 when $26.2bn was raised for investment in Asia Pacific, according to ANREV data, up from $22.84bn in 2016.
Recent final closes include LaSalle Investment Management raising $1.15bn for its latest pan-Asia opportunistic fund while e-Shang Redwood raised $1.4bn for its Japanese development fund. Meanwhile Fortress Investment Group is set to close its fourth Japan Opportunity Fund on just under $1.5bn.
A notable trend in fund-raising is the increase in capital from within the Asia Pacific region, which accounted for 85% of the equity in Asia Pacific funds raised last year, ANREV said, while US manager LaSalle said a record 15% of its latest equity raise came from Asian investors.